Tax expert Irakli Shavishvili expects the government to raise the GEL 40,000 property tax threshold, but says this is unlikely to reduce budget revenues. He believes the government could introduce other tax measures to offset any potential decline in revenue.
Shavishvili argues that the current model, which links property tax to an individual’s and their family’s income, is flawed. He said the GEL 40,000 threshold, introduced in 2005, has become outdated after 21 years, as income levels and the financial situation in the country have changed significantly.
However, based on his nearly 30 years of experience, Shavishvili said he is skeptical that the government would allow budget revenues to fall. He expects any increase in the threshold to be accompanied by changes that could increase the overall tax burden, either through property tax or other taxes.
The government is currently preparing changes to individual property taxation. Paata Kvizhinadze, Chairman of Parliament’s Finance and Budget Committee, told BMG that the property tax system will be changed during the autumn session, before citizens are required to file their declarations. Four possible models are reportedly being considered, although no final threshold or tax configuration has yet been agreed.
